UPDATE: Citigroup Initiates ArQule at Buy

Citigroup initiated coverage on ArQule

with a Buy rating and a $5 price target. Citigroup commented, "The discontinuation of the Phase 3 MARQUEE lung cancer trial for ARQL's lead drug tivantinib stripped nearly all remaining value of the program from ARQL's shares, leaving the stock trading just above cash. We believe tivantinib has shown to be active, is entering another Phase 3 trial in liver cancer, and has several near-term catalysts that carry little downside risk. ARQL is currently trading well below its fellow biotech peers with Phase 3 assets and appears well financed with cash runway to the end of 2014. Overall, with a disconnected valuation, near-term catalysts, and a long cash runway, we see ARQL shares poised for a correction." ArQule closed at $2.52 on Thursday.